Alberta’s premier calls the decision by the federal government to purchase the Trans Mountain Pipeline expansion project for $4.5 billion “a major step forward for all Canadians.”
“The deal announced today puts people to work building this pipeline right away and creating good jobs. This deal and this pipeline will unlock investment in our oilsands because we are now on the path to getting full value for our energy resources,” Rachel Notley said.
WATCH: Alberta Premier Rachel Notley says there is still work to be done to resume construction on the Trans Mountain pipeline project, hours after the feds announced a plan to buy the project.
READ MORE: Ottawa inks deal to buy Trans Mountain pipeline project for $4.5B
Federal Finance Minister Bill Morneau said Kinder Morgan will move forward with its original plan to twin the pipeline this summer while the sale is finalized, which likely won’t happen until August.
Once the sale is complete, Canada will continue the construction on its own, with a goal to sell the pipeline once market conditions will allow it to get the best price.
WATCH: Ottawa is buying Kinder Morgan’s Trans Mountain Pipeline. The finance minister said construction could begin this week. Kendra Slugoski reports.
READ MORE: Here is everything you need to know about Ottawa’s plan to (maybe) buy the Kinder Morgan pipeline
Notley said the federal government’s decision means the project is as close as it’s ever been to getting built, and makes it much more difficult for the B.C. government to stop the project.
“As a result of the pipeline having been purchased by the federal government, they have a form of Crown immunity which actually limits the degree to which provincial laws would apply to the project because it’s a federal project now,” she said.
“I suspect Premier [John] Horgan will go off to get legal advice and I can’t pretend to know what advice he will get, but certainly some folks would suggest their reference case will have less relevance.”
WATCH: Premier Rachel Notley discusses the B.C. government’s continued opposition of the Trans Mountain project despite the federal government’s purchase.
READ MORE: Edmonton Metro mayors pledge support for Trans Mountain pipeline expansion project
Alberta’s two big city mayors stood alongside the premier, praising the federal government for its decision.
WATCH: ‘This is entirely due to the actions of Premier Horgan’: Calgary Mayor Naheed Nenshi.
Alberta Federation of Labour president Gil McGowan said he’s impressed with the federal government for “taking decisive action.”
Export Development Canada will finance the purchase, which includes the pipeline, pumping stations and rights of way along the route between Edmonton and Vancouver, as well as the marine terminal in Burnaby, B.C., where oil is loaded onto tankers for export.
LISTEN: Where Does Edmonton NDP MP Linda Duncan stand on Trans Mountain expansion?
The Alberta government will provide funding for any unexpected costs that arise during construction.
“Alberta has contributed to today’s announcement by announcing that we will invest up to $2 billion to an indemnity pool that will ensure that the project will go ahead and that investment will only be payable once oil begins to flow through the pipeline,” Notley said.
READ MORE: NDP leader Jagmeet Singh sides with B.C. over Alberta in Trans Mountain dispute
WATCH: If the federal government owns the Trans Mountain pipeline project, who is legally liable if there were to be a spill? Alberta Premier Rachel Notley weighs in on the potential risk.
There has been intense opposition towards the project from environmental groups and some Indigenous communities in B.C.
“Prime Minister Justin Trudeau’s government has just signed up to captain the Titanic of tar sands oil pipelines, putting it on a collision course with its commitments to Indigenous rights and the Paris climate agreement,” Greenpeace Canada’s Mike Hudema said in a statement.
“Trudeau is gambling billions of Canadian taxpayer dollars on an oil project that will never be built.”
Hudema vowed the project will be cancelled despite the government’s purchase.
“Two out of five proposed new tar sands pipelines have now been cancelled in the face of Indigenous and environmental legal challenges, widespread public opposition and changing economics,” he said.
“The Trans Mountain expansion faces even steeper obstacles and will soon become the third, and Trudeau just put the public on the hook for the costs.”
READ MORE: Ottawa to buy Trans Mountain pipeline project, what does this mean for BC?
Notley said she’s seeing a shift within the Indigenous community towards greater support for the Trans Mountain project.
“As we saw over the weekend, we actually saw a number of rallies across B.C. and saw a number of spokespeople from Indigenous communities, who actually want to see this project go forward because they see that it provides benefit to their communities,” she said.
WATCH: Alberta Premier Rachel Notley says the province could still use Bill 12 if it’s in the best interest of Albertans despite federal government’s purchase of Trans Mountain pipeline expansion project.
Edmonton Riverbend MP Matt Jeneroux said while he’s been pushing the government “to assert their authority to get this pipeline built,” the deal has the potential to be “mired in bureaucracy” and likely cost taxpayers much more than $4.5 billion.
“This project is vitally important to Canada’s economy. However, the government’s promise to fund the project to the tune of $4.5 billion in taxpayer money shows how poorly they mismanaged the file from the beginning,” Jeneroux said.
“Kinder Morgan, a private company, could have started on this pipeline much earlier, and without taxpayers being on the hook for the costs, if the government had recognized the importance of the Trans Mountain expansion project from the start.”
United Conservative Party leader Jason Kenney tweeted Tuesday morning that the UCP would comment about the announcement later Tuesday.
LISTEN: Trevor Tombe of the School of Public Policy discusses the economics and risks of the Trans Mountain deal
READ MORE: No suitors emerge for Trans Mountain pipeline stake as Kinder Morgan deadline looms
The School of Public Policy executive fellow Richard Masson calls the federal government’s purchase “a necessary step” given the status of the project.
“Now the federal government is in a position to actually take over management of the project, make sure that they do what needs to be done to get it completed and that will, in the end, result in billions of dollars in extra revenues for companies, for taxpayers and for Albertans through the royalty system,” Masson said.
Masson cautions the federal takeover doesn’t guarantee the project’s completion as the pipeline expansion still faces several hurdles.
“The court challenges still exist, the protesters still exist, there are many many steps to get this pipeline built, and the future of pipeline expansion remains in limbo until we sort out new regulatory framework.”
LISTEN: Cache Creek Mayor thrilled about the deal
Canada approved the project in November 2016, following an expanded environmental review process that included additional consultations with Indigenous communities and assessing the amount of additional emissions likely to result from additional production.
Canada loses $15 billion every year on the sale of oil because the U.S. remains its only export customer, resulting in a lower price, Prime Minister Justin Trudeau argues. A lack of capacity in pipelines or in rail cars to ship oil produced in Alberta is also hurting Canada’s energy sector.
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